I want to … downsize to help fund my retirement 

By the time retirement comes around you may find yourself with a considerable amount of equity in your home and plenty of underutilised space since the children have now moved out. Here are some of the things you should consider when looking at downsizing:

  • Where do you want to move to?
  • Work is no longer a factor when considering where to live so you are now free to explore new options which means a sea change or even living overseas now a possibility. You may want to investigate whether your new location has adequate facilities such as health care or clubs and community organisation that you may want to be a part of.
  • What type of property will you be moving into?
  • You need to consider your needs not only now but also in the future. There will always be pros and cons in any type of property. For example, living in an apartment will generally mean less maintenance and if you are in a secured building you can just lock up and go away on holidays with ease. How accessible is the new property? Will you have problems in the future when mobility may become an issue?
  • Do the financial sides of things make sense?
    Moving into a new place comes with additional costs such as relocation, ongoing maintenance, agent fees, stamp duty, new furniture. Is this going to significantly eat into the amount of cash that you plan to invest back into your retirement savings?

 

Next is to determine how you plan on investing your surplus funds.

 

Have you considered any of the following:

  • Making an after tax (non-concessional) contribution into super. Be mindful of contribution caps and the total of your superannuation balance as from 1 July 2017 the rules have changed. If you are under the age of 65 you may be entitled to utilise the ‘bring forward’ rule.
  • From 1 July 2018 if you are aged 65 or over you will be able make after tax contributions into super of up to $300,000 for an individual or $600,000 for a couple from the proceeds of selling your principle residence. There are some requirements and this may affect some benefits such as the Aged Pension so it’s best to check with an adviser to see how this would
    affect you.

 

Speak to us today and we can help you put together your plan to help you achieve this and many of your other goals.

Discover how FinPeak can help